2026 set up for 'pretty good year,' says Powers Advisory Group's Matt Powers

Market Overview - The S&P has reached 39 all-time highs this year, with all 11 sectors turning positive [2] - The VIX index is under 14 for the first time in a year, indicating reduced market volatility [2] - The macroeconomic factors did not drive the market; instead, earnings were the primary driver [3] Future Outlook - The market is expected to set up well for 2025, with historical trends showing bull markets occurring every decade [3] - In the fourth year of a bull market, there is a 50% chance of continued positive returns, but also a significant risk of drawdowns [4] - Leadership within sectors is expected to rotate, with volatility likely to increase and overall returns moderating [5] Sector Analysis - There is a potential shift in leadership within the tech sector, with a focus on companies that demonstrate profitability and margin growth rather than just spending [7] - AI-related spending is projected to grow from $400 billion this year to $600 billion next year, particularly in infrastructure and data center buildouts [6] - Companies in cybersecurity and software are highlighted as potential beneficiaries of AI advancements [8][11] Investment Strategy - The focus is on dividend growth companies, which have a history of increasing dividends rather than just high-yield stocks [10] - The "Dogs of the Dow" strategy, which targets the highest yielding stocks, has outperformed expectations this year [10] - Specific companies like Palo Alto Networks are noted for their leadership in cybersecurity, which is becoming increasingly essential due to rising data access risks [11]